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Exercise 5-12 (Algo) Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sale margin ratios for the two products follow: Sales CM ratio. Product Flight Dynamic $ 720,000 68% Sure Shot $ 280,000 79% Total $ 1,000,000

Exercise 5-12 (Algo) Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sale margin ratios for the two products follow: Sales CM ratio. Product Flight Dynamic $ 720,000 68% Sure Shot $ 280,000 79% Total $ 1,000,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Exercise 5-12 (Algo) Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow Sales CM ratio. Product Flight Dynamic $ 720,000 68% Fixed expenses total $588,000 per month. Sure Shot $ 280,000 79% Total $1,000,000 Required: 1. Prepare a contribution format income statement for the company as a whole. 2. What is the company's break-even point in dollar sales based on the current sales mix? 3. If sales increase by $52,000 a month, by how much would you expect the monthly net operating income to increase?
Transcribed Image Text:Exercise 5-12 (Algo) Multiproduct Break-Even Analysis [LO5-9] Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot. Monthly sales and the contribution margin ratios for the two products follow Sales CM ratio. Product Flight Dynamic $ 720,000 68% Fixed expenses total $588,000 per month. Sure Shot $ 280,000 79% Total $1,000,000 Required: 1. Prepare a contribution format income statement for the company as a whole. 2. What is the company's break-even point in dollar sales based on the current sales mix? 3. If sales increase by $52,000 a month, by how much would you expect the monthly net operating income to increase?
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